Applications of green hydrogen in Mongolia
Technological potential and policy options
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This study examines the technical-economic potential of green hydrogen production in Mongolia and its application in three hard-to-reduce end-use sectors – namely heavy transport in the mining sector, public transport in Ulaanbaatar and decentralized space heating. cooking. Based on the results, the GHG emission reduction potential is estimated, followed by an analysis of potential policy options for the introduction of green hydrogen in the Mongolian context.
Despite Mongolia’s rich renewable energy resources, some hard-to-reduce sectors are technically difficult to electrify, and other decarbonization options should be considered. The climatic conditions in Mongolia, especially in the southern Gobi region, provide the country with favorable conditions for the production of green hydrogen. This study examines the technical-economic potential of the production and application of green hydrogen in three end-use sectors, including heavy transport in the mining sector, public transport in Ulaanbaatar and district heating in the ger districts.
We find that green hydrogen could be produced at a relatively affordable price, at 3.3-4.7 USD/kg of hydrogen – compared to a global average of 4.8 USD/kg in 2020. The location the most optimal for the production of green hydrogen with regard to profitability is in the South Gobi region. However, its production potential may be limited by the local availability of water resources which is already scarce in the southern region of the country.
Based on the demand-side analysis, the results suggest that heavy-duty transport in the mining sector is the most promising application when considering both economic feasibility and GHG emission reduction potential. . Switching to a fleet of fuel cell trucks in 2020 would only cost 12% more than buying and operating new diesel trucks, in terms of power delivered to the wheel. Switching to fuel cell trucks in full copper production and half of iron ore production in the country could mitigate about 1.2 Mt CO2e per year, which corresponds to about 3.5% of national emissions in 2014, for an estimated reduction cost of only 10 USD/tCO2e.
As most of the mining activities are located in the South Gobi region, green hydrogen can be produced at the lowest cost close to the end-use site and therefore has the advantage of not having to develop transport infrastructure. for green hydrogen, which could otherwise have a significant impact on profitability. The study further concludes that since few alternative decarbonization technologies are available for this end-use application, fuel cell trucks should be promoted through technology-specific policies such as the allocation and distribution of public funding for R&D and piloting. Public-private partnerships could test and demonstrate the technology to attract the interest of private actors.
In the second case study analysis, a switch to fuel cell-powered public transport buses in Ulaanbaatar is considered, compared to the purchase of new diesel buses. The results suggest that such a change would cost only 15% more than buying and operating new diesel buses. As the bus fleet is relatively small and there are few other urban areas in the country with a large public bus fleet, the potential for scalability and mitigation is limited, amounting to approximately 39 ktCO2e per year, for an estimated reduction cost of more than 100 USD. /tCO2e.
Since, in the case of buses, there are other alternatives to decarbonization besides green hydrogen, policymakers could adopt a more technology-neutral approach that also incentivizes various decarbonization technologies. The application of policies such as tax exemptions, purchase subsidies and vehicle emission standards could engage the private sector in identifying the most appropriate technology. Alternatively, the relatively small nature of the sector could provide a useful demonstration project to support the further development of green hydrogen technologies for other applications, as well as in neighboring countries.
Finally, we estimate the technical and economic potential of using green hydrogen for decentralized heating and cooking, using LPG as the reference fuel. Currently, green hydrogen is not cost competitive as it would be 148% more expensive than LPG and is therefore not considered a feasible option in the short term. Nonetheless, the heating sector in Mongolia remains emissions-intensive and will likely require some form of seasonal energy storage to fully decarbonize in the long term. Green hydrogen should therefore not be completely ruled out as a long-term option, but should be part of potential future technology portfolios.
The techno-economic assessment conducted as part of the study provides a first attempt to identify the potential added value that a green hydrogen sector could bring to Mongolia. Based on this, a step-by-step methodology is suggested for the development of a national green hydrogen vision, and the subsequent formulation of specific supply and demand side policies.
Contact for more information: Anna Nilsson, Gustavo de Vivero